In 2016, 21% of AR/VR deals included a China-based investor, many of which participated in the industry's largest deals.

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Where is this data coming from?

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Virtual and augmented reality will likely hit the mainstream in Asian markets before the rest of the world, and Chinese investors have increased investment at a rapid clip. We used the CB Insights database to look at funding by investors based in Greater China into AR/VR startups.

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In this research briefing, we take a deep dive into the rise of Chinese investors in U.S. tech companies, which areas are seeing the most interest, and where BAT (Baidu, Alibaba, Tencent) are investing and more.

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Yearly trend

At an annual scale it’s clear that investment took off in 2016. Last year, China-based investors participated in 36 deals totaling $1.2B in disclosed funding, which translates to 71% growth in deals and a 277% boom in funding. In total, 21% of AR/VR deals included a China-based investor last year.

Many of the industry’s biggest deals last year had a China-based investor, including Magic Leap‘s $794M Series C mega-round (which had involvement from Alibaba Group), NextVR‘s $80M Series B deal (which had 5 Chinese investors), and headset maker Osterhout Design Group‘s $58M Series A (which saw participation from O-film Tech Co. and Vanfund Urban Investment).

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The use cases for AR/VR continue to expand, from content to design to medical application. Sign up for a free trial and look for AR/VR in the Collections tab.

Quarterly trend

At a quarterly level, it’s notable that Chinese AR/VR deals hit an uptick in mid-2015, leveled off in early 2016, and are now back to an all-time high with 10 deals in Q4’16.

Last quarter, deals with Chinese backing included Lumus‘ $30M Series C (backed by HTC, among several others), Baobab Studios‘ $25M Series B (which saw investment from Horizons Ventures), and Infinity AR‘s $18M Series C (led by Alibaba Group as a strategic partner).

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